Tax break for affordable housing in Minneapolis

5 Replies

Minneapolis just passed a 40% property tax reduction for properties which are considered affordable: 

http://www.startribune.com/tax-break-will-increase...

Seems like it could be a handout for investors who have properties that already qualify.  Right now it is just open for 10+ unit properties but if it drops to smaller units it would likely get filled up quickly as a 40% reduction in taxes may be worth dropping rent in one 4 plex unit.

This is very interesting....sounds like they are sort of listening, but it doesn't really help value add investors like myself.  

Did you see the new item that passed in Saint Louis Park?   They are now proposing a new buyer that raises rents by improving a property may have to pay up to $4500.00 per tenant....absolutely crazy....of course every tenant and attorney is going to jump all over this and likely other cities will adopt a similar policy.

Wow - haven't seen that.  SLP was where I purchased my first investment property back in the day.  Haven't followed the area much the last several years.

@James W. you may want to follow SLP in case Hopkins or Minnetonka follow suit.

Do you have a link @Michael Tempel ?  I have not heard of this before.  

It is interesting what some cities are doing.  I was looking at a house in Anoka and they are actually trying to reduce the number of rental units in their city.  Many cities do not have enough, but Anoka is limiting applications and their goal it to have more owner occupied RE in the area.  

From my Fair housing attorney:

“Did you see that Saint Louis Park passed an ordinance that anyone buying a property and raising rents or giving notices that have an adverse effect on affordable rents – will have to pay cost and relocation of up to $4500 per tenant?”

https://www.stlouispark.org/home/showdocument?id=8332

I really hope MHA and NAA fight this.   True market rate rent is going to start to become a thing of the past the way things are going.   

I like Anoka, my guess is it only limiting units in SF, but likely isn’t limiting MF.    If so, that might make it a better place to invest.   Supply will eventually catch up to demand.   

Has anyone applied / been accepted to 4D?  I have an 11 plex with all units currently below the threshold for 50% AMI.  Is there any reason not to apply for all 11?  It's in an 'up and coming' neighborhood but it's been up and coming for 10 years so I can't imagine it will change much in 10 years.

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