The Housing and Redevelopment Authority approved rent increases for its homebuyer program and granted a loan payment deferral for a major affordable housing development during its January 14 meeting.

The board voted 5-1 to approve changes to the Rental Homes for Future Homebuyers Program, including a 5% rent increase for current tenants and higher eligibility requirements for new participants. The increases will affect 21 rental properties in the program, with current residents seeing monthly rent increases ranging from $55 to $71. New tenants will pay rents set at Metropolitan Council's 50% area median income level of $1,615 per month.

HRA Administrator Anna Salvador said the rent increases are necessary to maintain safe and quality housing after significant capital improvements completed in 2024. The program, which has helped 60 households purchase homes to date, provides affordable rental housing with homeownership coaching over approximately five years. Salvador emphasized that despite the increases, most participants maintain healthy escrow contributions for future down payments.

The board unanimously approved Aeon's request to defer $395,445 in loan payments for 2025 on the Blooming Meadows South development. Dr. Eric Anthony Johnson, Aeon's president and CEO, explained that the 306-unit complex faced financial challenges following the pandemic, including 63% revenue loss due to nonpayment of rent and increased maintenance costs. The deferred payments will be added to the loan's maturity date in 2040, with regular payments expected to resume in 2026.

Staff also provided an update on sanitary sewer funding impacts, noting that new Sewer Availability Charges of $2,026 per unit could affect housing development costs. The city implemented the fees to fund $55 million in sewer improvements needed by 2040, with staff planning to return by March with potential exemptions for affordable housing projects.