RE: [Mpls] Boulevard development loses committee vote

[John Rocker]

Victoria Heller asked, "Can anyone produce evidence that shows that these subsidies ACTUALLY REDUCE the amount of rent that the developer charges?"   Rents at tax credit developments are restricted, usually for 30 years. HUD sets the maximum allowable rents each year based on 1) the area's median income; 2) the income restriction of the units (i.e., 30% of area median income (AMI)); and 3) the number of bedrooms. Because the maximum allowable rents are based on the county’s or region’s median income, the allowable rents sometimes exceed the achievable market rents in a neighborhood. Therefore most lenders and state housing finance agencies require that projects be underwritten at rents at least 10% below comparable market rate rents.   With apologies to those without HTML email or receiving the digest version of this, the 2002 maximum allowable tax credit gross rents (including all utilities) in Minneapolis are:   Bedrooms 60% AMI 50% AMI 40% AMI 30% AMI  Studio  $       805  $       671  $       537  $       403  1 Bedroom          863          719          575          431  2 Bedroom        1,035          862          690          517  3 Bedroom        1,196          996          797          598  4 Bedroom        1,335        1,112          890          667  5 Bedroom        1,472        1,226          981          736   The 2002 maximum income levels vary by household size and are as follows:   % AMI  1-person  2-person  3-person  4-person  5-person 60% $32,220 $36,840 $41,400 $46,020 $49,680 50% $26,850 $30,700 $34,500 $38,350 $41,400 40% $21,480 $24,560 $27,600 $30,680 $33,120 45% $24,165 $27,630 $31,050 $34,515 $37,260 30% $16,110 $18,420 $20,700 $23,010 $24,840                                   John Rocker Calhoun