Woodbury approves affordable housing land banking policy despite opposition
Woodbury's Housing and Redevelopment Authority voted 4-1 on January 28 to adopt a new land banking policy that will use state affordable housing funds to acquire property for future low-income housing development. The decision came after debate over whether the city should be in the real estate business.
The Housing and Redevelopment Authority approved the HRA Land Banking Policy (HRAD-1.6), which establishes a program to buy and hold land specifically for affordable housing targeting households earning no more than 50% of the area median income. Member Kim Wilson cast the sole dissenting vote.
The policy is funded through Local Affordable Housing Aid (LAHA), a sales tax created by the state in 2023 and collected across the metro area. Housing and Economic Development Manager Jamie Fritts explained that these funds come with strict spending deadlines—if Woodbury doesn't use the money, it reverts to the state. "The money has spending timelines attached to it, so if the money is not spent, it goes back to the State," Fritts said.
Wilson opposed the plan, stating she didn't want the city "owning, buying, or holding real estate" and objected to using taxpayer dollars "to sit on properties until it is the right time to resell the land." Commissioner Santini raised concerns about potential conflicts of interest and the need for clearer language to assure the public that the council wasn't immediately approving land purchases. However, Members Morris and Stafford supported the policy as an essential tool for addressing Woodbury's affordable housing shortage, noting the city had successfully used land banking in the past for developments like City Walk.
In a separate action, the authority unanimously approved applying for a $333,474 Livable Communities Development Grant from the Metropolitan Council. The grant would fund Two Rivers Community Land Trust's efforts to acquire and rehabilitate single-family homes in Woodbury, creating permanently affordable homeownership opportunities through the Community Land Trust model. Fritts noted this grant is critical for making the model work in a high-cost area like Woodbury. The authority will serve as the grant sponsor and manage compliance with the program requirements.
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Votes (2)
Adoption of HRAD-1.6 HRA Land Banking Policy
Dissent: Kim Wilson
Moved by Member Morris [7:33 PM Jan 28, 2026] · Seconded by Member Stafford [7:33 PM Jan 28, 2026]
The HRA discussed the establishment of a land banking program, funded by Local Affordable Housing Aid (LAHA), to acquire and hold land for future affordable housing development, particularly for households earning no more than 50% of Area Median Income. Housing and Economic Development Manager Jamie Fritts clarified the policy's objectives and funding mechanism. Commissioner Santini expressed concerns about conflicts of interest, liabilities of long-term city ownership, and the need for clear processes. Commissioner Wilson strongly opposed the City engaging in real estate ownership and questioned the use of LAHA funds for holding property. Conversely, Commissioner Morris and Stafford supported the policy as a vital tool to utilize state-mandated LAHA funds for local affordable housing needs, emphasizing that the funds have spending timelines and would revert to the State if unused.
Approval of Authorization to Apply for 2026 Livable Communities Development Grant
Dissent: None indicated
Moved by Not specified in transcript (Staff Recommendation adopted) · Seconded by Not specified in transcript (Staff Recommendation adopted)
The HRA considered staff's recommendation to apply for a 2026 Livable Communities Development Grant. The grant of up to $333,474 is earmarked for Two Rivers Community Land Trust to acquire and rehabilitate single-family homes in Woodbury, promoting permanently affordable homeownership using the Community Land Trust model. The HRA will act as the sponsor and manage the grant funds and compliance. This initiative is vital for expanding affordable housing options in Woodbury, given its high property costs, and will complement other funding sources like the Community Development Block Grant.
Notable Quotes (8)
The land banking program would be funded primarily through the City’s annual disbursements of Local Affordable Housing Aid (LAHA). Adoption of the proposed land banking policy by the HRA would formally establish the program and define it.
She expressed concern that the public would think there is a conflict of interest. She wondered if the language could be changed so that it mentioned Council direction and made it clear that the Council was not approving the purchase of land for land banking right now.
She stated that she did not like the City being in the business of owning, buying, or holding real estate... She added that she does not like that taxpayers' dollars through the LAHA fund would be used to sit on properties until it is the right time to resell the land.
Mr. Fritts explained that LAHA funds were created in 2023 by the State, and it is an additional sales tax that is collected in the metro area... The money has spending timelines attached to it, so if the money is not spent, it goes back to the State.
He explained that he was optimistic about the policy because he has been a fan of land banking, and it is another tool in the toolbox for the City.
The City of Woodbury has the opportunity, as a jurisdiction participating in the Local Housing Incentives Program established by the Metropolitan Livable Communities Act (LCA), to apply for LCA grants from the Metropolitan Council.
Up to $333,474 to fund the acquisition and rehabilitation of single-family homes in the City of Woodbury by Two Rivers Community Land Trust.
The LCA Development grant provides an opportunity to obtain the funds needed to make the CLT model work in Woodbury for a small number of homes and expand long-term affordable ownership options for residents.
Ordinances & Resolutions (10)
Authorizing application for 2026 Livable Communities Development Grant funds.
Office of the HRA Executive Director memo regarding the Livable Communities Development Grant application.
Grant opportunity from the Metropolitan Council for which the HRA is applying.
Legislation establishing the Local Housing Incentives Program and LCA grants.
Policy adopted to establish procedures for an HRA-administered land banking program.
Adopting the HRAD-1.6: HRA Land Banking Policy.
City plan guiding housing goals and strategies, including affordable housing production.
City's long-range plan aligning development efforts.
City policy governing grant applications and management.
Separate funding Two Rivers Community Land Trust requested from the City.
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Application for Livable Communities Development Grant
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