051925 Work SessionH O U S IN G AN D R E D E V E L O P ME N T AU T H O R IT Y W O R K S E S S IO N
R IC H F IE L D MU N IC IPAL C E N TE R, B AR TH O LO ME W R O O M
MAY 19, 2025
6:00 P M
C all to order
1.P resentation on the results of the evaluation of the Housing and Redevelopment A uthority's housing programs.
A djournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96
hours in advance to the City Clerk at 612-861-9739.
AGENDA SECTION:Work Session Items
AGENDA ITEM #1.
STAFF REPORT NO. 16
WORK SESSION
5/19/2025
REPORT PREPARED BY: Julie Urban, Asst. Community Development Director
DEPARTMENT DIRECTOR REVIEW: Melissa Poehlman, Executive Director
5/15/2025
OTHER DEPARTMENT RE VIEW: N/A
ITEM FOR WORK SESSION:
Presentation on the results of the evaluation of the Housing and Redevelopment Authority's housing
programs.
EXECUTIVE SUMMARY:
Over the past several months, Housing and Redevelopment Authority (HRA) staff have been evaluating the
HRA's housing programs. At the work session, staff will present a draft of the evaluation, which includes the
following components:
Housing Goals and Needs: A review of the various goals and housing needs that guide the HRA’s
housing efforts and how different programs seek to address and meet those needs. Goals and needs
have been collected from City planning and strategic documents and community voices.
Financial Picture: A detailed look at expenditures and revenues, showing where funds are focused by
both type of activity and by need, and identifying the resources available through 2030.
Summary Findings: A summary of the most salient points and conclusions drawn from the evaluation.
Program Summaries: A deep-dive into nine different housing programs, looking primarily at the last 10
years. Findings, Things to Think About, and Next Steps are highlighted for each program.
Work Plan: The Next Steps in the Program Summaries become a work plan for 2025-2027.
DIRECTION NEEDED:
Listen to the presentation and provide feedback on the draft evaluation. Staff is specifically seeking
discussion and feedback on which goals and activities the Housing and Redevelopment Authority sees
as priorities, whether we're putting resources into the right priorities, and where there are gaps.
BACKGROUND INFORMATION:
A.HISTORICAL CONTEXT
Current housing market realities (e.g., high interest rates, rising costs, shortage of housing) and a changing
funding landscape create both challenges and opportunities as the HRA seeks to meet the housing needs of
the community. These factors, along with the City's Strategic Plan goals, led staff to conduct an evaluation of
the HRA's housing programs and housing-dedicated funding in order to create a plan for future housing work.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
The Strategic Plan lays out several desired outcomes that help to guide the HRA's work in housing and are
considered in this evaluation:
- Maintain Richfield as an affordable place to live.
- D iversify the tax base.
- P rioritize climate resilience.
- Reduce racial inequities and barriers for traditionally excluded groups.
C .P OL IC IE S (resolutions, ordinances, regulations, statutes, exc):
S everal documents provide guidance for the HRA 's work in housing, including the S trategic P lan,
C omprehensive P lan, Inclusionary Housing P olicy, and the A ffordable Housing Trust F und adopted priorities.
D .C R IT IC AL T IMIN G IS S U E S:
S taff anticipates taking HRA comments and questions and bringing a finalized document to the HRA in June.
E .F IN AN C IAL IMPAC T:
P rojected expenditures and revenues will be presented at the work session.
F.L E GAL C ON S ID E R AT ION:
NA
ALTE R N AT IV E(S):
NA
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
NA
AT TAC H ME N T S:
D escription Type
D raft Report B ackup Material
May 2025
1 Richfield HRA Housing Program Evaluation
Housing Program Evaluation
Richfield Housing and Redevelopment Authority and
Economic Development Authority
HRA/EDA Housing Programs: Background
The Richfield Housing and Redevelopment Authority (HRA) has provided resources to
support the community’s housing stock and its residents since its inception in 1974. Over
the years, programs have focused on both rehabilitation and new construction,
homeownership and rental housing opportunities, and served residents across the
spectrum of income levels and in varying stages and situations of life.
The HRA’s housing program history began with a focus on housing rehabilitation and
scattered-site affordable new construction. In the 1990s and into the 2000s, new housing
programs were created that focused on diversifying the housing stock and replacing
housing (and population) lost to airport expansion, road projects, and commercial
redevelopment (which was undertaken to diversify the tax base). The aging of the housing
stock and the need to maintain it also became more of a focus in the late 1990s. As
housing prices increased in the 2000s, it became more and more difficult to cost-
effectively continue those housing programs, until in 2009, the housing “bubble” burst,
and the HRA shifted its attention to addressing the housing foreclosure crisis and aiding in
the market recovery.
Just as the market was returning to more typical conditions, in 2016, the community
experienced the loss of 698 Naturally Occurring Affordable Housing (NOAH) apartments as
the Crossroads Apartments became The Concierge and a significant number of low-
income and vulnerable residents were displaced. In response, city leaders prioritized the
needs of residents who rent their housing and the housing needs of low-income residents.
At the same time, new priorities began to emerge and were interwoven into HRA housing
efforts, including: climate change, the negative impacts of systemic racism in the housing
market, the needs of people with disabilities, and a re-thinking of zoning regulations to
encourage “missing middle” housing options. To meet these and other community
priorities, the Economic Development Authority (EDA) was created in 2017, and EDA levy
funds became available for economic development and housing programs.
The HRA/EDA’s focus pivoted to emergency rental assistance during the COVID-19
pandemic, and program effectiveness was impacted by supply-chain impacts, rising
May 2025
2 Richfield HRA Housing Program Evaluation
construction costs, rising interest rates, rising housing prices, and a state-wide shortage of
housing. These challenges continue today, and combined with changing funding streams,
are re-shaping the HRA’s housing programs moving forward.
Consistent throughout the HRA’s 50 years has been a recognition of the value of the
community’s housing stock, and the need to preserve and improve it for generations to
come.
Housing Program Evaluation
Current housing market realities and the changing funding landscape create both
challenges and opportunities as the HRA seeks to meet the housing needs of the
community. These challenges and opportunities, along with the following factors, have
propelled and shaped this evaluation of the HRA’s housing programs:
In 2021, the State Legislature approved special legislation that allows the HRA to
transfer pooled tax increment to its Affordable Housing Trust Fund, releasing
significant funding that can be used for meeting housing needs.
In 2023, the City Council adopted a Strategic Plan that includes a goal to maintain
Richfield as an affordable place to live. Other tangential housing goals in the
Strategic Plan include diversifying the tax base, reducing racial inequities and
barriers for traditionally excluded groups, and making climate resilience a priority.
In 2023, the State Legislature created a metro-area sales tax that provides a
dedicated source of revenue to cities, Local Affordable Housing Aid (LAHA), to
develop and preserve affordable housing.
In 2026, the City will no longer receive a direct allocation of Community
Development Block Grant (CDBG) funds (approx. $180,000 annually), which has
been used to fund housing rehabilitation and affordable homeownership programs
since the late 1970s.
These factors provide both challenges and opportunities to guide HRA housing activities
over the next six years. The Evaluation includes the following components:
Housing Goals and Needs: A review of the various goals and housing needs,
collected from City planning and strategic documents and community voices, that
guide the HRA’s housing efforts and how different programs seek to address and
meet those needs.
Financial Picture: A detailed look at expenditures, showing where funds are focused
by both type of activity and by need.
May 2025
3 Richfield HRA Housing Program Evaluation
Summary Findings: A summary of the most salient points and conclusions drawn
from the evaluation.
Program Summaries: A deep-dive into nine different housing programs, looking
primarily at the last 10 years. Findings, Things to Think About, and Next Steps are
highlighted for each program.
Work Plan: The Next Steps in the Program Summaries become a work plan for 2025-
2027.
Note: The Evaluation does not do a “deep-dive” into either the Housing Choice Voucher or Kids@Home
rental assistance programs, although the local funding dedicated to Kids@Home is included in the
expenditures analysis. The primary focus of the evaluation is the HRA’s ongoing housing programs; therefore,
the use of funds for NOAH preservation and funds committed from the Affordable Housing Trust Fund to new
rental housing is only included in the expenditure analysis.
May 2025
4 Richfield HRA Housing Program Evaluation
Goals and Needs
Need Why? Where? Definition
Housing Maintenance Long-time goal; mentioned in nearly
all guiding documents
Physical work to support the
longevity and livability of all
dwellings
Cultural Diversity & Close-Knit
Community
Included in description of the Urban
Hometown
Welcoming differences and
building strong inter-cultural
connections among neighbors,
buildings with community spaces
Diversifying our Tax Base Diversifying Tax Base included in
Strategic Plan, discussed in recent
4d discussions. Maintaining a
diversity of housing types and price
ranges.
Making sure that our tax capacity
can support future needs, like
multifamily rehab and city
infrastructure and that taxpayers
aren’t unduly burdened.
Meeting Current Low-Income
Resident Needs
Decades-long city commitments to
this goal
Direct assistance and loans for
immediate issues and housing
stability
Ending Racial Disparities Included in Strategic Plan Creating opportunities to correct
decades of disinvestment and
exclusion
Accessible Housing Stock City commitments to this goal;
prioritizing this in our program
criteria
Creating and adapting homes to
support people with disabilities to
live full lives, including ramps,
proximity to/space for care
teams/family, and accessible
spaces
Building Type Diversity Comprehensive Plan, lifecycle
housing
Diversify our postwar rambler
housing stock to provide housing
choices throughout life cycle.
Climate Action/Renewable
Energy Transition
Climate Action Plan, energy costs
are part of housing stability
Helping property and homeowners
prepare to shift to renewable and
energy efficiency mechanicals and
reduce energy cost burden
Affordable Housing Creation Strategic Plan names goal to meet
Met Council expected growth need
Creating affordable housing by
building new, purchasing/investing
and subsidizing, and subsidizing
housing of those with low incomes
Housing Affordability
Preservation
Maintaining a diversity of housing
types and price ranges
Preserving affordable housing that
exists in our community through
financial support and land trusts
Housing Affordability Mix/
Emerging Needs
Strategic Plan names goal to meet
Met Council expected growth need.
Maintaining a diversity of housing
types and price ranges
Providing appropriately priced
housing for households at all
income levels and sizes as incomes
and financial realities change
May 2025
5 Richfield HRA Housing Program Evaluation
Programs and Goals/Needs Matrix
X– program meets need; P- program could potentially meet need; ? – unknown)
Richfield Rediscovered New Home First Time Homebuyer Home Energy Squad Deferred Loan Fix Up Loan Transformation Loan Advisor Programs Rental Assistance Apartment Remodeling NOAH Rental Preservation New Affordable Rental Housing Housing Maintenance X X X X X X X
Cultural Diversity & Close-Knit
Community P P P X X P
Diversifying our Tax Base X P; rehab P X X X X
Affordability: Meeting Current Low-
Income Resident Needs X X X X X ? X P X X
Equity: Ending Racial Disparities ? ? X X X X
Accessible Housing Stock X X X X P X P X
Building Type Diversity X X (ADUs) X
Climate Action/Renewable Energy
Transition X P P X P X P P P P X
Affordable Housing Creation X X X
Housing Affordability Preservation X X X X P X X X
Housing Affordability Mix/
Emerging Needs X X X
May 2025
6 Richfield HRA Housing Program Evaluation
Matrix of Programs by Affordability
May 2025
7 Richfield HRA Housing Program Evaluation
Expenditures
Projecting future spending based on current programming, the anticipated spending on
Housing Programs from 2025-2030 is $5.2 million.
An additional $2 million has been committed to NOAH Preservation and proposed
affordable rental new construction.
Adding local rental assistance through the EDA’s Kids@Home program brings total
housing expenditures to over $8 million, which will serve an estimated 2,055
households over the six-year period.
PROGRAM
EXPENDITURES
2025-2030 # UNITS
First-time Homebuyer $1,200,000 66
Deferred Loans $80,000 3
Land Trust Acquisition Rehab $1,040,000 12
NOAH Rehab $800,000 434
Transformation Loans $840,000 42
Advisor Programs $126,000 510
Fix-Up Loans $240,000 48
Home Energy Squad $30,000 522
Substandard Acquisitions: RR/NH $900,000 6
SUBTOTAL $5,256,000 1,643
NOAH Preservation* $1,570,000 236
Affordable Rental NC** $500,000 80
Rental Assistance*** $834,000 138
TOTAL $8,160,000 2,055
*Does not include the value of the 4d(1) tax classification granted to the preservation of three NOAH properties.
**Does not include value of reduced land sale price.
***Line item represents the local Kids@Home rental assistance only. An additional $2 million in federal funds is
dedicated to providing rental assistance to approximately 300 households annually, and beginning in 2026,
approximately $500,000 in State funds will provide rental assistance to up to 55 additional households annually.
May 2025
8 Richfield HRA Housing Program Evaluation
As a percentage of total expenditures, the largest housing expenditure is for NOAH
preservation (19%), followed by the First-time Homebuyer Program (15%),
acquisition/rehab through the land trust (13%), and new construction through Richfield
Rediscovered and the New Home Program (11%).
Green: Rental Programs
Orange: Low-Income Homeownership Programs
Blue: Homeowner Programs (all Income Levels)
Purple: New Construction Owner-Occupied Homes
May 2025
9 Richfield HRA Housing Program Evaluation
Breaking down expenditures by high-level goals (with some programs and therefore
expenditures working toward multiple goals):
- $5 million is dedicated to preserving affordability;
- $2 million maintains the housing stock, and
- approximately $2 million increases the tax base.
$- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000
Maintaining Affordability
Maintaining the Housing Stock
Diversifying the Housing Stock
Equity - Disparity Reduction
Climate Action
Diversifying the tax base
Expenditures by Goal
May 2025
10 Richfield HRA Housing Program Evaluation
The largest amount of funding is spent on affordable homeownership ($2.16 million),
rehabilitation ($2.11 million), and rental preservation ($1.57 million).
*Rental preservation does not include value of 4d(1) tax classification.
*Affordable Rental NC does not include the value of reduced land sale price.
$900,000
$2,160,000
$2,116,000
$500,000
$1,570,000
$834,000
Expenditures by Activity
Blight Removal + Homeownership NC
Affordable Homeownership
Rehab
Rental New Construction
Rental Preservation
Rental Assistance
May 2025
11 Richfield HRA Housing Program Evaluation
Summary Findings
Positive Results
HRA programs address a range of community
needs with the greatest resources focused on
maintaining affordability.
Several programs demonstrate clear success in
terms of number served, use of funds, impact,
and investment leveraged.
80% of 61 First-time
Homebuyer loans were made to
households of color.
Transformation Loans
leveraged an investment eight
times the HRA’s expenditures.
Richfield Rediscovered
leveraged an increase in the tax
base six times the investment.
Potential
Some programs have lower than expected
participation. Further exploration of the causes and
additional marketing efforts (and in some cases
focused marketing) is warranted.
Some programs likely have greater needs than
resources currently available. Further exploration of
the need is warranted and could be part of the
Comprehensive Plan update (or a precursor to).
There are funds available for potential new and/or
expanded programming. We need to decide on
priorities, identify unmet needs, administrative
capacity, and possible partners.
Underutilized
Advisor programs
Apartment Remodeling
Home Energy Squad
Greater Needs
Deferred Loan
Apartment Remodeling
Fix-Up Fund Interest Rate
Write-Down
May 2025
12 Richfield HRA Housing Program Evaluation
Program Administration
There is a long “to-do” list relating to program-administration. We will need to
prioritize and assess our capacity for making changes.
We should track who we’re serving across all programs (where practical), develop
metrics for each program, and track annually how well we’re meeting community
needs.
Adaptability
We cannot change the housing market through our
programs. There are many external factors out of our
control, but we can respond to market changes. We
should review programs annually and adjust
programs (and possibly priorities) as market
conditions change.
Some programs can be refined to use funds most
efficiently and where need is greatest.
The uncertainty over the Deferred Loan Program (and
future of CDBG) is a concern. We may need to be
prepared to find (or advocate for) a replacement.
Adjust to Market
First-time Homebuyer
Fix-Up Fund Interest Rate
Write-Down
Target Funds
Transformation Loan
Apartment Remodeling
Increase Impact
Where possible, we should seek to
embed multiple goals within all
programs, and pair programs to meet
multiple goals.
For programs where multiple goals are
already incentivized, explore ways to
increase usage.
New Home affordability + rehab
First-Time Homebuyer affordable
homeownership + rehab
Loan Programs + Home Energy Squad
Advisor Programs + Loan Programs
Apartment Remodeling rehab + energy
efficiency + accessibility
May 2025
13 Richfield HRA Housing Program Evaluation
Revenue Picture
The funding picture is positive for the next six
years, but the amount of pooled TIF begins to
decline in 2026.
Ongoing programming is dependent on LAHA
and EDA levy funds. These are the only current
revenue streams to support ongoing programs.
$396,000 of Rehab Loan Program existing and
anticipated repayments are funding Fix-Up
Fund, Home Energy Squad, and Advisor
Programs. There are sufficient funds to cover
these programs through 2029 and then HRA
Levy (source of funds prior to 2024) would need
to be tapped to continue the programs.
Projected Revenue (2025-2030):
Sustained
$2.2 million EDA levy
$2.5 million LAHA
One-Time
$396,000 Rehab Loan
repayments
$825,000 Affordable Housing
Trust Fund
$194,000 Apartment
Remodeling Loan repayments
$172,000 CDBG (anticipated)
Potential Funding Opportunities
There are several potential one-time,
flexible revenue sources that could
provide up to $317,500 in funding.
Outside organizations offer funding
opportunities annually through
competitive RFPs. We should explore
possible projects as capacity allows.
$225,000 State Match (applied)
$232,000 New Home Program
repayments
$100,000 (est.) in forfeited Point of
Sale Escrow funds
Hennepin County CDBG
Minnesota Housing RFP
Met Council LIHIA
May 2025
14 Richfield HRA Housing Program Evaluation
HRA Funding Opportunities
Assuming current programming levels, there is $225,000 available annually for new/
replacement/expanded affordable housing programming.
$200,000 in HRA levy funds could be directed annually towards housing programs from
2025-2030.
Assuming we continue current programming, there will be approximately $3.9 million
($657,000/year) in pooled TIF available through 2030 that may be used for housing
activities and/or commercial-related activities. Possible uses include blighted
commercial and residential acquisition/removal, residential acquisition/rehab,
commercial incentives, NOAH preservation/rehab, affordable multi-family new
construction.
Impending deadlines will impact decisions on how we can spend this money, and
action at the Legislature this session could alter the deadlines. In 2026, these
deadlines will be settled, and the HRA’s financial consultant will provide an updated
financial accounting of the amount of funding available for various activities.
May 2025
15 Richfield HRA Housing Program Evaluation
Program Summaries
Advisor Programs
Fix-Up Fund
First-Time Homebuyer
Home Energy Squad
New Home Program
Transformation Loan
Apartment Remodeling
Deferred Loan
Richfield Rediscovered
Program Evaluation: Advisor Programs 2025
Remodeling Advisor and
Architectural Consultation Programs
The Remodeling Advisor program began in the 1990s. Staff saw a need to help to educate
and inspire homeowners wanting to improve their homes. The program allows residents to
sign up for a free visit with a Remodeling Advisor who can help troubleshoot or prioritize
home improvements and give advice about how to accomplish remodeling goals. The
Advisor service is currently provided by the Center for Energy and Environment (CEE).
With the success of the Remodeling Advisor program, the Architectural Consultation
began in 2011 with the goal of providing design advice for residents looking to complete
larger scale remodeling projects. Residents can sign up for a discounted consultation visit
with a participating architect.
Funding Source: HRA levy, loan repayments
G OALS & O BJECTIVES: Maintain the Housing Stock
M aintain and invest in the housing stock and help people stay in Richfield.
Findings
Programs are utilized at a similar rate on
average but vary from year to year.
Participation declined during the peak
years of the pandemic and has only
gradually increased.
Both programs are utilized throughout
the community.
Quick Stats
Total Remodeling Advisor visits since
2017: 213
Average per year: 27
Total Architectural Consultations
since 2015: 290
Average per year: 29
30 residents who utilized an advisor
program have gone on to receive a city
loan (Transformation, Fix Up,
Deferred)
Program Evaluation: Advisor Programs 2025
Things to Think About
Believe intuitively and anecdotally that there is value in both programs as both serve
different remodeling needs, but information on effectiveness is lacking (e.g., how
many visits lead to remodeling).
Neither program has been fully expending the amount budgeted. Why aren’t more
households using the programs? Are there barriers? Would increased marketing
increase usage? Could the services be offered in Spanish to increase usage?
NEXT STEPS
1. Create better guidance for residents trying to decide which program will best fit their
needs.
2. Explore ways to increase outreach in order ensure that programs are being utilized by
those who need them and funds are fully utilized.
3. Communicate regularly with the Advisor to better track needs and to increase use of
City financing programs.
4. Explore efficient ways to track effectiveness of programs given limited staff capacity.
A Richfield family used an architectural consultation to start the design process of remodeling the attic
bedroom in their home to include a home workspace and a bathroom. This home had been in the
family since the home was built in 1952. The third-generation owners were excited to invest in the
property and make it an updated space to raise the next generation of their family.
Before After
Program Evaluation: Advisor Programs 2025
Green = Remodeling Visits; Red = Architectural Advisor Visits
Housing Program Evaluation: Fix-Up Fund Interest Rate Write-Down May 2025
Community Fix-Up Fund
Interest Rate Write-Down Program
Minnesota Housing’s Community Fix-Up Fund (CFUL) offers low-interest home
improvement loans to moderate-income homeowners. The HRA buys down the CFUL
interest rate to three percent for homeowners earning less than 115% of the Area Median
Income.
The Program dates to 2011 and was originally a partnership of multiple cities and included
matching write-down funds through Minnesota Housing. The HRA began partnering with
the Center for Energy and the Environment to administer the Program in 2017.
Loan amounts range from $2,000-$35,000 with terms up to 20 years depending on the loan
amount. The CFUL interest rate is currently 7.5%.
The Program ran out of funds in 2023 and 2024 leading the HRA to increase the budget from
$25,000 to $40,000 and reduce the maximum loan amount from $50,000 to $35,000.
Funding Source: HRA Levy and Loan Repayments (2024)
G OALS & O BJECTIVES: Maintain and Improve the Housing Stock
Encourage and leverage improvements to the housing stock by offering a low-
cost financial incentive to moderate-income homeowners.
Findings
Three out of ten CFUL recipients in the past two
years also participated in the Transformation Loan
Program (3 out of 13 Transformation loans in the
past two years).
The amount of per loan subsidy increased
significantly in 2024 as interest rates rose ($4,700
to $9,100).
From 2019-2024, homeowners primarily financed
quality of life improvements rather than health
and safety projects.
Quick Stats (2012-2024)
Total Loans: 77
Total Loans since 2018: 22
HRA Funding: $232,000
Amount Leveraged: $1.56 million
Housing Program Evaluation: Fix-Up Fund Interest Rate Write-Down May 2025
1
3
5
7
9
11
13
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Community Fix Up Fund
HRA Write-Down -Loan Amounts -Number of Loans By Year
Loan Amount HRA Write down # of loans
Housing Program Evaluation: Fix-Up Fund Interest Rate Write-Down May 2025
Things to Think About
If more moderate-income Transformation Loan applicants are depending on this
funding to finance their projects, we may want to reconsider the maximum loan
amount.
You can get a lot of impact with a little funding for this type of work (a “leverage ratio”
6.73). With the interest rates and costs of maintenance rising, we’ve seen these
funds get depleted much faster than normal. Is the Program meeting the need? Is this
an area to increase HRA investment?
The program did not operate in 2021-2022 when the CFUL interest rate was
especially low. Should the written-down interest rate increase when interest rates are
higher? The rate is currently 7.5% (up from 4.5% in 2022, 5.75% in 2023, and 6.25% in
2024).
NEXT STEPS
1. Track dual use of Fix-Up Fund and Transformation Loan. Revisit maximum loan
amount if the close relationship continues.
2. Explore adjusting the interest rate write-down amount as CFUL interest rates vary.
3. Consider increasing the Program budget for 2026.
4. Explore possible other sources of funds to match HRA funding.
Housing Program Evaluation: First Time Homebuyer Downpayment Assistance May 2025
First Time Homebuyer Downpayment Assistance
The First Time Homebuyer program began in 2018 in response to racial homeownership
disparity rates in Richfield and was originally aimed at current Richfield renters, many of
whom are households of color. The program serves buyers who earn less than 80% of the
Area Median Income and have not owned a home in the past 3 years. Applicants are
eligible for $15,000 loans if they meet the income limits. Households are eligible for loans
up to $20,000 if they are Richfield renters, have children under 18 living in the home, or
have a household member with a documented disability. These are interest-free loans that
are forgiven on a pro-rated basis of 10% each year and fully forgiven after 10 years.
Funding Source: LAHA (in the past, CDBG and Affordable Housing Trust Fund)
G OALS & O BJECTIVES: RE DUCE RACIAL INEQUITIES AND BARRIERS AND M AINTAIN
R ICHFIELD AS AN AFFORDABLE PLACE TO LIVE
Provide homeownership opportunities to low- and moderate-income
households, especially to those communities that have been
historically/systemically excluded from homeownership.
Findings
The Program is successfully serving
households of color.
As interest rates have risen, incomes of
participants have risen closer to the income
cap.
First-time homebuyers range in household size,
but half the households are 3-4 people.
Homes have been purchased largely in areas
not impacted by racially restrictive covenants
and mostly on the east side.
Have seen higher Housing Ratios in recent
years (7 loans in 2024 with above 36% of
income toward mortgage) as interest rates
have risen. There have been more Executive
Director exemptions as well, most of which are
related to housing ratio, but occasionally
involve expected births or temporary disability.
Quick Stats (2018-2024)
$1M in loans
61 Households Served
4 Households <60% AMI
Served
80% households of color
served
>90% households of color
served in the last 3 years
8 households with a
member with a disability
Housing Program Evaluation: First Time Homebuyer Downpayment Assistance May 2025
Approximate First Time Homebuyer Loan Locations Over Density of Racially Restrictive Covenants,
2018-2024
Brighter blue, more recent Loan
Darker red, higher concentration of Racially Restricitve Covenants
0
2
4
6
8
10
12
14
16
18
20
2019 2020 2021 2022 2023 2024
Race/Ethnicity Served by Year
White non hispanic hispanic (any)black more than one
other american indian asian
Housing Program Evaluation: First Time Homebuyer Downpayment Assistance May 2025
Things to Think About
As home prices have risen, low- and moderate- income buyers require greater
subsidies in order to purchase homes.
Rising interest rates make monthly mortgage payments less affordable even with
additional subsidies. Is there a point when we’re encouraging risky purchases?
Home maintenance and repairs can be difficult to afford for low- and moderate-
income homeowners. Should we consider re-starting the First-Time Advantage
Program (offered rehab loans to new homeowners in the 2000s)?
Do we have a role to play to ensure that purchases are dispersed throughout the
community?
NEXT STEPS
1. Offer post-purchase resources to new homeowners.
2. Continually evaluate the role of our downpayment assistance in relation to other
downpayment resources available.
3. Evaluate whether allowing stacking with first generation loans is worth the risk to
serve lower income households.
4. Consider funding levels and more selective criteria based on market cycle factors like
interest rates (e.g., only Richfield renters).
A family with a member with a disability who could not find affordable, accessible
rental housing …
A single mother teen parent, local high school graduate who built up a career in the
public sector and saved up by living with her parents for a few years…
A multigenerational household choosing to live together, seeking stability for aging
parents…
were all able to buy a home in Richfield through the FTH Program.
Housing Program Evaluation: Home Energy Squad Enhanced May 2025
Home Energy Squad
Home Energy Squad is a service offered by the Center for Energy and the Environment
(CEE) that is a comprehensive, easy-to-use, one-stop energy-efficiency program that helps
homeowners reduce energy bills. The HRA pays $50 for a typical visit, and $100 for a low-
income owner visit. After an in-home assessment by CEE staff, energy-saving materials are
installed and residents are provided with a report outlining home improvements, their
rough costs, and the impact on energy savings for the household. The City has been
contracting with CEE on this program since 2013.
Funding Source: HRA Levy; Loan Repayments
G OALS & O BJECTIVES: Climate Resilience, Maintain Affordability, Reduce
High Energy Burden
Reduce our community’s energy use and lower residents’ energy cost
burden.
Quick Stats (2013-2024)
1,000 home visits completed
50 Low Income homeowners served since this option became available in 2016
Findings
After a peak of high interest and participation in the first year, visits have hovered
between 50 and 100 each year.
0
50
100
150
200
250
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Home Energy Squad Loans Per Year
Housing Program Evaluation: Home Energy Squad Enhanced May 2025
A smaller percentage of low-income homeowners were served in 2024.
Things to Think About
This is a partnership, and currently we don’t ask CEE to collect demographic information
about households they serve. This leaves us with a blind spot to whether or not this
program is reaching across language and culture barriers.
NEXT STEPS
1. Cross-promote when people call for assistance with maintenance projects.
2. Focus marketing on low-income homeowners.
3. Consider culturally-relevant promotion of the program.
25%
26%12%
0
10
20
30
40
50
60
70
80
90
2022 2023 2024
Low-Income Households Served As Share of All Households
Served By Year
Reg Low Income
Housing Program Evaluation: New Home Program May 2025
New Home Program
The HRA has supported affordable homeownership opportunities through the New Home
Program since its inception in the 1970s, serving households earning below 80% of the
Area Median Income. The program has shifted between acquisition/rehabilitation to new
construction as opportunities have been available.
Most recently, the program has focused on acquisition/rehabilitation with long-term
affordability using the land trust model where the land trust retains ownership of the land
and sells the structure to a qualified buyer.
In the past, affordability gaps were covered by the HRA with a second mortgage that was
due and payable upon the sale of the property or after 30 years. In 2023, the HRA
authorized the Executive Director to forgive the mortgages when they reach maturity.
Repayment proceeds have accumulated over time.
Funding Source: CDBG, Affordable Housing Trust Fund, Pooled TIF
G OALS & O BJECTIVES: Maintaining Affordability and Maintain and Improve
the Housing Stock
Provide long-term, affordable homeownership opportunities to low and
moderate-income households and improve and maintain the housing stock when
possible.
Findings
The average HRA cost of new construction has been
less than acquisition/rehabilitation due to greater
partner resources and some low-cost, vacant lot
opportunities.
The acquisition/rehabilitation model has allowed the
HRA to continue offering affordable homeownership
opportunities as opportunities for new construction
have declined, and the land trust model provides for
long-term affordability, spreading the costs over 99-
year lease term.
$232,000 in repayments from the program’s second
mortgages have accumulated in an HRA fund, which
can be redirected back into this or another program.
Quick Stats (2015-2024)
Total New Homes: 10
Average Net HRA Cost:
$87,000
Total Acq/Rehab Homes: 9
Average Net HRA Cost:
$94,000
Remaining 2nd Mortgages: 9
Foreclosure Rate: 14% (7)
Housing Program Evaluation: New Home Program May 2025
In recent years, the Program has been geographically dispersed:
0
1
2
3
4
5
6
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
New Home: Affordable Homeownership
New Construction Acq/Rehab
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
New Home Program: Average Subsidy
New Construction Acq/Rehab
Housing Program Evaluation: New Home Program May 2025
Things to Think About
The last two HWR homes have been almost move-in ready. A secondary goal of the
program has always been to improve the housing stock and increase livability. Should
we encourage HWR to focus on homes in need of rehab? Do they have the capacity?
The past few years, HWR has only been about to acquire and rehabilitate one home
per year and budgeted funds have gone unused.
At subsidies around $80,000 per unit, is the Program the most cost-effective way to
provide affordable home ownership opportunities?
NEXT STEPS
1. Send out targeted mailings to homes below a certain valuation with information
about how to sell to WHAHLT/Habitat etc.
2. Consider alternatives to meeting goals of affordable homeownership and improving
affordable housing stock (e.g., re-start First-Time Advantage program).
3. Explore new partnerships to increase capacity beyond one home per year.
4. Explore what other cities are doing for long-term affordable homeownership.
A Richfield home had been vacant for some time due to medical issues of the owner. Given the
condition of the home and lack of maintenance over the years, family members struggled to find a
buyer willing to take on such a large project but were able to connect with the local land trust, Homes
Within Reach (HWR). After a major remodel that involved gutting to the studs and replacing all the
mechanicals and roof, a new homeowner moved in: “When I found out about HWR after
unsuccessfully looking for a home that I could afford, I was ecstatic! They helped me all along the way
through a lengthy process and enabled me to finally own a home.”
Housing Program Evaluation: Transformation Loan Program
May 2025
Transformation Loan Program
The Transformation Loan Program began in 1994 and provides loans up to $25,000 towards value-
added (i.e., transformative) home improvements with a minimum project cost of $50,000. The loan
is a no-interest, deferred loan that covers up to 15% of the total project costs, forgiven after 30
years. Additional incentives are available for projects that include an ADU, accessible
improvements, and energy-efficiency improvements.
Funding Source: EDA Funds
G OALS & O BJECTIVES: Diversify the Housing Stock and Increase the Tax
Base
I mprove and maintain an aging housing stock by providing financial and technical
assistance to homeowners so they may make home improvements and undertake
expansions to accommodate their housing needs.
Findings
Overall, loan recipients tend to stay in their homes. For
loans over 5 years old, the average loan age is 13 years
old and there have only been 2 foreclosures since the
program began.
Quick Stats (since 2015)
• 53 Loans
• Average of 5.3
loans per year
• Average Loan
Amount: $18,506
• Total
Expenditures:
$983,342
• Total Amount
Leveraged:
$8,156,379
Housing Program Evaluation: Transformation Loan Program
May 2025
Project expenses went up A LOT in 2024, and loan contributions may not be as
impactful for larger projects.
Average loan amounts have increased.
Housing Program Evaluation: Transformation Loan Program
May 2025
While loans have been more heavily concentrated on the west side of the City since
the program’s inception, over the last 10 years the loans have been more dispersed:
A family is finishing their basement in order to create a space for their aging parents to live.
Upgrades include a bedroom, living area, accessible bathroom and chairlift.
A retired contractor is building an Accessory Dwelling Unit for his disabled adult daughter so that
she can stay close by for support while maintaining some independence.
Things to Think About
The program has been primarily focused on diversifying the housing stock and
increasing the tax base, but we could look for ways to focus the program on more
modest-income households.
As project costs increase, our loan contributions are less of an incentive especially
for higher income households.
Housing Program Evaluation: Transformation Loan Program
May 2025
NEXT STEPS
1. Staff will analyze the effectiveness of incentives implemented in 2023 for projects
that included an ADU, accessibility upgrades, energy efficient features, or duplex
conversion.
2. In 2025 we began tracking the demographics of applicants (household size,
race/ethnicity, income level). We will look at the demographic data collected from
this round and see if there are any major takeaways.
3. We will explore ways to refine the program such as adding income limits, priority
application periods, shorter loan-term requiring repayment for higher income
households, etc.
Before After
Housing Program Evaluation | Apartment Remodeling Loan Program May 2025
Apartment Remodeling Program
The Apartment Remodeling Program (ARP) was created in 2018 and offers 15-year, no-
interest, forgivable deferred loans to rental housing properties with 4+ units. Loans of up to
$10,000 per unit ($50,000 maximum per building) provide funds for maintenance and
improvements to buildings that charge rents at or below 60% of the Area Median Income
(AMI). A 1:1 match from the property owner is required. The Program was modified in 2023
to provide additional incentives for energy-efficiency and accessibility improvements and
to allow rental property with 1-3 units to apply from August–December, if funds remain. In
2024, the Center for Energy and Environment took over administration of the Program.
Funding Source: Economic Development Authority Levy
G OALS & O BJECTIVES: Maintain & Improve the Housing Stock and Maintain
Richfield as an Affordable Place to Live
Encourage investment in the City’s aging apartments, focus on buildings that
charge rents less than 60% of the AMI.
Findings
The Program has been underutilized (75% of
budgeted funds used).
Given the age of the rental housing stock and
observations from Housing Inspectors, there
is a significant need for the Program.
Small buildings (10-17 units) have been the
primary users of the Program.
Windows, roofs, and parking lots have
accounted for a majority of the (58%) funds
spent.
Quick Stats
Total # of loans: 14
Total Amount Loaned: $523,892
Total Budgeted: $700,000
Additional Investment Leveraged:
$611,000
Energy-Efficiency Incentive: $10,000
The owner of an 11-unit building read about the program on a flyer that was inserted into
the rental license renewal mailing. She had taken over management of the building her
father built and took advantage of the loan opportunity to upgrade exterior doors, paint,
and repair siding and window wrap.
Housing Program Evaluation | Apartment Remodeling Loan Program May 2025
Things to Think About
To truly address the maintenance and improvement needs of the community’s
apartments will likely require a significantly larger investment.
Many buildings are owned by long-time owners without mortgages and any turnover
leads to increased rents as new owners require mortgages to finance the purchase
and frequently have a backlog of improvement needs to address.
NEXT STEPS
1. Create a plan for increasing utilization of the program through outreach and
marketing.
2. Create a plan for increasing the use of the energy-efficiency and accessibility
incentives.
3. Assess the total need for improvements and the risk of building turnover and loss of
affordability.
4. Explore/advocate for options for financing improvements at other levels of
government. Consider focusing local resources on smaller buildings.
5. $55,000 of a $100,000 grant remains to be spent. The focus of the grant program has
been to improve units of long-time tenants. Evaluate merging the grant funds into the
loan program to get the funds spent.
6. Standardize the process for collecting loan data.
Housing Program Evaluation | Apartment Remodeling Loan Program May 2025
Apartment Remodeling: Types of Improvements
Windows Roofs Security/fob system
Parking lots Doors Siding and Painting
Misc. and Code items Carpeting HVAC
Insulation
Housing Program Evaluation | Deferred Loan Program May 2025
Deferred Loan Program
The Deferred Loan Program offers no-interest deferred loans up to $30,000 for housing
maintenance and repair projects to homeowners earning less than 80% of the Area Median
Income (AMI), prioritizing those earning less than 50% AMI. The loan is repaid upon the sale
of the home or forgiven after 30 years. The Program in its current form began in 1984 and
was administered in-house until 2004 when it was transferred to Hennepin County.
Funding Source: Community Development Block Grant (CDBG)
G OALS & O BJECTIVES: Maintain & Improve the Housing Stock and Maintain
Richfield as an Affordable Place to Live
Provide no-cost financial assistance to low-income homeowners to repair and
maintain their homes.
Findings
The transition to County administration in
2005 has resulted in fewer loans being
processed. The fewer loans is also a result of
less funding as CDBG funding levels have
declined.
A significant number of repayments have
helped to sustain the Program.
A small number of loans (7%) have been lost
to foreclosure/settlement/forgiveness
($440,000).
45% of loans since 2019 have been used for
emergency repairs (e.g., sewer back-ups,
water damage, furnaces).
Quick Stats (1984-2024)
Total # of loans: 479
Total Amount Loaned: $6 million
Total Repaid: 272
Total Amount Recycled: $2.47 mil
Total # Matured: 29
Since 2019
Households over 65: 48%
Families w/ Children: 20%
BIPOC Households: 20%
The Program helps families, including the working family with children who struggled to make ends
meet but was able to replace windows, siding, and insulation, thereby improving energy-efficiency.
And the Program enables older residents to stay in their homes, including the elderly widow on a
fixed income who was able to make accessibility improvements.
Housing Program Evaluation | Deferred Loan Program May 2025
Things to Think About
Beginning in 2026, Richfield homeowners will be part of an all-suburban County
Program, which could result in reduced service and local input. As of 2024, there
were 2,003 households on the all-suburban waiting list, 110 of them Richfield
residents.
Richfield is currently the only community with a 30-year loan term. Beginning in 2026,
all repayments will be returned to Hennepin County for the all-suburban pool of
funds, so more Richfield homeowners will be replenishing the pool of funds than
homeowners in other communities. There are currently 133 open loans, 58 of which
are older than 15 years ($1.1 million).
There is significant uncertainty regarding the future of federal funding, which could
negatively impact the Program.
NEXT STEPS
1. Quantify and prioritize the need for the program (e.g., 1,200 low-income homeowners
are cost-burdened).
2. Consider forgiving all Richfield loans older than 15 years (58 loans).
3. Plan for the possibility that the needs of Richfield homeowners will not be met by the
all-suburban pool. Consider and advocate for options if federal funding is reduced or
eliminated.
4. Identify potential new partners to provide rehab loans for our lowest-income
homeowners.
5. Encourage Hennepin County to create a separate emergency loan program and
explore the creation of a local emergency loan program.
I
Housing Program Evaluation | Deferred Loan Program May 2025
Housing Program Evaluation | Richfield Rediscovered May 2025
Richfield Rediscovered
The Richfield Rediscovered Program began in 1990 providing opportunities for the construction
of new, market-rate homes . The HRA either purchases a substandard home and makes the vacant
lot available for new construction, or it provides a $50,000 credit to an individual purchasing a
substandard home and replacing it with a new home. The new home must meet size, design, and
price minimums established by the HRA, and more recently, the Program has offered incentives for
energy-efficiency, universal design, and “missing middle” housing types. The most recent “era” of
the Program began in 2010 as the housing market began recovering from the foreclosure crisis.
Funding Source: Pooled Tax Increment in the Housing & Redevelopment Fund
G OALS & O BJECTIVES: Diversify the Housing Stock & Increase the Tax Base
Remove blighted homes and diversify the housing stock through the construction
of larger, modern housing options.
Findings
For every $1.00 in net expenditures, there was
an average $6.13 increase in finished home
value.
From 2010-2024, there was a 10-unit increase in
density.
The average subsidy and the ratio of value to
cost was slightly higher for the Credit Program
($39,000 and 7.87) than the Lot Sale Program
($43,000 and 5.65).
The Program has been declining in recent years
as home prices of even substandard homes
have increased significantly.
Quick Stats (2010-2024)
# of Homes Built: 50
Total Subsidy: $2.11 million
Average Home Value: $404,000
Total Increase in Home Value:
$12.99 million
Average Value to Cost Ratio: 6.13
The HRA purchased a tax -forfeited property, which had been vacant, neglected, and off the
tax rolls for over five years following the death of the elderly owner. A local family worked
with a builder to design and construct their dream home to meet the needs of their growing
family. The property went from a tax value of zero to its current tax value of $ 573,000.
Housing Program Evaluation | Richfield Rediscovered May 2025
Things to Think About
The Program is less active because there are fewer substandard homes available,
and the primary source of funding is declining and demand has increased (e.g., being
used to purchase substandard commercial properties).
There are still substandard homes where removal is the optimal choice (e.g., Code
Enforcement troubled properties, early “cabins” and “garage homes”); however, the
cost of even these homes is making the Program less economically viable.
There are two vacant lots remaining, and efforts to construct “missing middle”
homes on the properties have been financially challenging. Additional HRA subsidy
may be required to accomplish this goal.
NEXT STEPS
1. In 2025, continue to market the remaining two lots for “missing middle” housing,
considering reduced lot price, and search for new partners.
2. In 2026, if no duplexes are moving forward, reconsider the goals for the lots.
3. Identify remaining substandard homes to determine the number of future
opportunities. May want to reconsider “appetite” for amount of subsidy considered
given potential for increasing tax base.
Housing Program Evaluation | Richfield Rediscovered May 2025
0
1
2
3
4
5
6
7
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Richfield Rediscovered: Market-Rate New Construction
Lots Credits
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
RR: Total Home Value Increase v. Net Expenditures
Value Increase Subsidy
May 2025
16 Richfield HRA Housing Program Evaluation
Next Steps Compiled – to be added when report is finalized
May 2025
17 Richfield HRA Housing Program Evaluation
Appendix A: Selected Goals from Guiding Documents
Strategic Plan
• Increased Tax Base (New Housing Units, # and Net Increase)
• Maintain Richfield as an affordable place to Live (housing cost burden,
housing unit affordability)
• Diverse Inclusive and Thriving Hometown (Reduction in homeownership
disparity)
Climate Action Plan
• Promote Renewable Energy Installation and Purchasing (rental property
owners and homeowners)
• Encourage Sustainable Design & Building Practices
• Reduce Waste Generated & Promote Responsible Disposal
Comprehensive Plan
• Urban Hometown Definition: "quality housing"
• Urban Hometown Definition: "cultural diversity"
• Goal: Maintain and enhance Richfield’s commitment to housing
maintenance, rehabilitation and redevelopment, resulting in an attractive,
desirable and prosperous community
• Goal: Provide a full range of housing choices that meet residents’ needs at
every stage of their lives and ensure a healthy balance of housing types that
meet the needs of a diverse population with diverse needs. (related:
Maintaining a diversity of housing types and price ranges.)
• Sustainability & Energy Goal: Install solar panels or similar energy sources
on public buildings and encourage owners of businesses and private
property owners to do the same
• Framework: Strengthening and enhancing the low- density residential areas
of the community
• Framework: Emphasizing sustainability as a measure to ensure the future
economic, environmental and social health of the community
• Community Engagement: more housing options, value affordability
May 2025
18 Richfield HRA Housing Program Evaluation
Appendix B: Census Data Richfield 2020 Race and Ethnicity
Hispanic or Latino 18.4%
White alone 59.0%
Black or African American alone 9.7%
Asian alone 6.6%
American Indian and Alaska Native
alone 0.5%
Other, more than one race 5.7%
Richfield Financial Characteristics of Households Units With or Without a Mortgage
ACS 2023 (Table S2507)
income in last 12 months HH w/ Mtg HH w/o Mtg
Less than $10,000 73 10% 63 6%
$10,000 to $24,999 180 26% 309 29%
$25,000 to $34,999 98 14% 365 35%
$35,000 to $49,999 346 50% 312 30%
Sum of Households 697 1049 Count of HHs not paying
30% or more of income 19 531
percent paying <30% of
income on housing 3% 51%
Nearly all low-income households with a mortgage are cost-burdened, about half of low-income
households without a mortgage are cost-burdened. Cost-burdened households are more likely to
experience difficulty affording basic living necessities. Most of these 1,700 homes owned in Richfield
qualify for assistance in our programs. Richfield Renters Gross Rent as a Percentage of Household Income
ACS 2023 (Table B25070)
Less than 20% 29%
20 to 29 Percent 27%
30 to 39 Percent 13%
Greater than 40% 29%
May 2025
19 Richfield HRA Housing Program Evaluation
Richfield Renter Cost Burden by Annual Income
Gross Rent as a percentage of Household Income by Annual Income
ACS 2023 (Table B25074)
$10,000
to $19,999:
$20,000
to $34,999:
$35,000
to $49,999:
$50,000
to $74,999:
$75,000
to $99,999:
$100,000
or more:
Less than 20% 5% 5% 2% 12% 53% 83%
20 to 29 Percent 11% 5% 26% 47% 39% 15%
30 to 39 Percent 6% 21% 27% 20% 5% 0%
Greater than 40% 75% 69% 43% 21% 3% 2%