04-0227R

RESOLUTION APPROVING 2005 LOW-INCOME HOUSING TAX CREDIT QUALIFIED ALLOCATION PLAN.

BY COUNCILOR GILBERT:

WHEREAS, pursuant to Minnesota Statutes, Chapter 462.A221, et seq., the city of Duluth, Minnesota, is a suballocater of low-income housing tax credits (LIHTCs); and

WHEREAS, the city of Duluth as a suballocator is authorized to administer 2005 LIHTCs in an amount to be announced by the Minnesota housing finance agency in early 2005; and

WHEREAS, in accordance with Section 42 of the Internal Revenue Code of 1986, as amended, a qualified allocation plan for 2005 (the plan) setting forth criteria governing the award of the city's LIHTCs has been prepared; and

WHEREAS, the plan was available for review and written comments by the general public and a public hearing was held on April 12, 2004; and

WHEREAS, the Duluth housing commission met on March 11, 2004, and recommended approval of the plan to the city council.

NOW, THEREFORE, BE IT RESOLVED, that the 2005 city of Duluth low-income housing tax credit qualified allocation plan, on file in the office of the city clerk as Public Document No. _____, is hereby approved.


STATEMENT OF PURPOSE:  The purpose of this resolution is to approve the city of Duluth 2005 low-income housing tax credit qualified allocation plan. Section 42 of the United States Internal Revenue Code requires that agencies authorized to allocate such credits develop a qualified allocation plan which sets forth selection criteria to be used in determining housing priorities which are appropriate to local conditions in order to allocate credits to various housing projects. The city of Duluth is authorized to administer 2005 tax credits in an amount to be announced by the Minnesota housing finance agency (MHFA) in early 2005. This amount is estimated to be $236.953.

The Duluth housing commission (DHC) has recommended changes from the 2004 plan. In addition to updating to 2005 dates and the new estimated credit amount, the language concerning preliminary applications has been deleted. A new "Article 9" has been added, providing that in certain circumstances the city council will review housing tax credit applications without DHC participation, and that the city may adjust fees to cover costs. A new extended use monitoring fee of $15 per unit was added. Because the city council indicated last year that they intended to award 2005 tax credits to a domiciliary project, there is a new selection priority worth 100 points for projects proposing permanent supportive housing for chronically homeless persons with disabilities related to drug and alcohol addiction and/or mental illness.