Bloomington HRA approves $10M budget with levy increase
The Bloomington Housing and Redevelopment Authority unanimously approved its 2025 budget and a $300,000 levy increase on Tuesday, backing new affordable housing programs and staff positions. The authority also cleared the way for a nonprofit developer to refinance loans on three apartment complexes while preserving long-term affordability protections.
The HRA board voted 6-0 to approve both a special benefit levy and the overall 2025 budget, which totals more than $10 million. The levy increase will fund new initiatives including the Bloomington Affordable Homeownership Program, loan tracking software, expanded legal assistance, and four new staff positions. About 70% of the HRA's total budget comes from federal grants, with the remainder supported by local property tax levies.
Staff told the board that future levy increases will likely be needed to support capital planning, property management, and a reserve fund for larger strategic projects across the city. Commissioner Carter asked about the stability of federal funding given recent election results, but staff assured the board that historically, major funding cuts have not occurred—though administrative changes are monitored closely.
In a separate 6-0 vote, the board approved a resolution allowing Aon, a nonprofit affordable housing developer, to refinance mortgages on three properties: Cedar Gate, Cedar Glen, and Metropolitan Towers. The move requires subordinating HRA loans originally made in 2017. Staff emphasized that resubmitting the subordination agreement will preserve affordability restrictions on the properties through 2047, preventing them from converting to market-rate housing if Aon were to sell them. Without these protections in place, a future buyer could convert the apartments to higher-priced units.
The board also discussed "missing middle housing"—smaller housing types like duplexes and triplexes that have largely disappeared from Bloomington due to restrictive zoning rules. Staff proposed adjusting zoning codes to allow more diverse housing options and address affordability challenges. Board members expressed support for increasing housing flexibility and homeownership opportunities, though some cautioned against changes that might price out current residents or shift the market entirely toward rentals.
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Votes (3)
Approval of Final Special Benefit Levy Pursuant to Minnesota Statute Section 469.033 Subdivision Six for 2025 HRA Budget
Dissent: None
Moved by Unknown [18:22] · Seconded by Bellinger [18:46]
The staff report detailed the HRA's mission, funding sources (levy, federal grants like HCV and CDBG), and budget allocation across operations, housing stability, homeownership pathways, housing creation, and preservation. A significant portion (70%) of the budget comes from federal funding. The proposed 2025 levy increase of $300,000 aims to cover costs for HUD INSPIRE program changes, the Bloomington Affordable Homeownership Program, loan tracking software, increased legal assistance, and the maintenance of four new staff positions. Commissioner Carter inquired about the funding sources for the new positions and potential impacts of election results on HUD funding, receiving assurances that major funding cuts were not historically observed but administrative changes are monitored.
Approval of Final Budget for 2025 for the Housing and Redevelopment Authority in and for the City of Bloomington
Dissent: None
Moved by Wooten [19:05] · Seconded by Doubling [19:12]
Following the approval of the special benefit levy, the Board proceeded to a separate vote for the overall 2025 budget for the HRA. No further discussion was noted, indicating a consensus built during the previous staff report and Q&A.
Motion Approving Resolution 2024 Approving Subordination and Authorizing Related Actions to Subordinate HRA Loans with Aon for Cedar Gate, Cedar Glen and Metropolitan Towers
Dissent: None
Moved by Moody's [25:02] · Seconded by C [25:02]
Aon, a non-profit affordable housing developer, requested HRA approval to subordinate existing $12,500 loans on three properties to facilitate refinancing their primary mortgages. These HRA loans, dating from 2017, came with restrictive covenants ensuring affordability until 2047. Staff clarified that resubmitting the subordination agreement would maintain these covenants, preventing the properties from potentially reverting to market rate should Aon repay the HRA loan and sell to a market-rate entity. Commissioners sought assurance that the action would indeed preserve affordability and not just enable refinancing without long-term benefit.
Notable Quotes (7)
So I'd like to highlight the mission which is to create a stable, inclusive community through safe and dignified housing choices.
You can see from this breakdown that about 70% of the HRA budget is actually through allocated Federal funding.
And would likely be anticipating asking for a higher levy increase in future years and that's the fund various things capital planning for one thing the management the HRA owned properties also staffing to support strategic work and implement our programing and then also we want to build a reserve or have funding available support some of these larger strategic projects and investments to support across the city.
So big one there is the Bloomington Affordable Homeownership Program which is you all know, a very significant grant from Minnesota Housing and is a big focus of HRA work over the next few years.
So we are keeping an eye I mean and any changes are administration these Federal programs. So we are of course keeping an eye on announcements as always just to be aware of any of any upcoming changes and that's helpful to note that the last time there weren't significant reductions in the dollar amount so it's more of the administrative changes.
If we choose to resubmit it will ensure that those restrictive covenants that I mentioned will not be terminated. And having those covenants in place give us security that the affordability terms that we negotiated will persist until after the end of our long term which would be 2047 or if the if and chooses to voluntarily the mortgage then that covenant would terminate.
But you said IAN is mission based to preserve affordable housing. I don't foresee that necessarily resulting in the affordability being lost but what it could result in is if they were to make a sale of those properties to like a market market rate rent or property manager then we wouldn't have that security in place.
Ordinances & Resolutions (4)
Legal basis for the final special benefit levy.
Resolution approving the subordination of HRA loans for Aon properties.
City's long-range plan, potentially to incorporate medium-density housing areas.
Building code that applies to housing developments with more than two units, increasing construction costs.
Source document
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Other Topics from This Document
Subordination of HRA Loans for Affordable Housing Preservation
Discussion on Missing Middle Housing Initiatives
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