Travis Bestadue, deputy director of Community Development, presented the City of Burnsville’s proposed use of Local Affordable Housing Aid (LAHA) at the Economic Development Commission meeting on June 6, describing staff recommendations and seeking commissioner feedback. No vote was required; the item was informational.

Bestadue said LAHA revenues stem from a new 0.25% metro-area sales tax that is pooled across the seven-county Twin Cities region and then allocated to cities based on need. Burnsville received about $405,000 for the half-year in 2024; staff estimate ongoing annual receipts of roughly $800,000 as sales-tax collections grow.

City Council directed staff to retain and administer Burnsville’s LAHA allocation rather than delegate it to Dakota County. Bestadue said the council asked the city to prioritize additional investment in existing rehab and senior programs, require energy audits for loan recipients, and to explore a radon mitigation option.

Staff overviewed existing housing programs that LAHA would complement: Community Development Block Grant (CDBG)-funded rehab loans (0% interest, 30‑year term; historically about $15,000–$35,000 loans and four to five projects per year), an EDA-funded home improvement loan program (3% interest, 10–20 year amortization; funded at $75,000 per year, serving roughly two to four projects annually), and a senior deferred loan program (2% interest, no payments until a sale or title change; funded at $25,000 per year and supporting about two to three projects annually since 2022).

For the initial LAHA tranche, staff recommended: allocating $300,000 to expand the homeowner rehab revolving fund (to be matched with the existing $75,000 EDA allocation), and providing $100,000 to expand the senior deferred loan program (on top of the current $25,000). Bestadue said the increased capital and a proposed $5,000 minimum loan modification should enable more small-scale repairs and create a true revolving fund. Staff estimate the $300,000 increase could support roughly six to 12 additional homeowner rehab projects annually and the $100,000 could support five to 10 additional senior projects annually.

Bestadue described planned future programs under consideration for 2026 and later, including: Burnsville Home Start (a down-payment assistance product prioritizing Burnsville renters and capped at 50% of the down payment, up to $40,000); "productive properties" (a program to acquire and rehabilitate long-vacant single-family houses—Bestadue said the city has approximately seven to eight vacant single-family homes that are blighting neighborhoods—and re-sell them to households at 0–80% area median income, potentially with a long-term occupancy covenant); and emergency housing vouchers administered by staff to provide short-term hotel stays (up to two weeks) for households temporarily displaced while safety or habitability issues are addressed.

Commissioners asked several operational questions: how LAHA dollars are allocated (bestadue confirmed funds are pooled regionally and then distributed by formula), program administration (the city plans to continue contracting with the Center for Energy and Environment, CEE, as loan servicer), borrower eligibility and loan terms, contractor selection (CEE facilitates contractor outreach and bid collection; homeowners select contractors), and program performance (senior deferred loans began in 2022 and staff said loans have been utilized within months of award; there have been a small number of paybacks when properties sold and no reported defaults).

Staff identified implementation constraints and next steps: LAHA dollars received in 2024 must be committed by the end of 2027 and spent by 2028; staff will bring updates to the EDA on June 17 to amend home-loan policy and to renew the CEE contract; program details for Home Start, productive properties and emergency vouchers will be developed over the next 3–6 months. Bestadue said the LAHA program is iterative and staff expect to return with refinements after initial implementation.

The Commission provided generally positive feedback, raising trade-offs among approaches (for example, larger-impact acquisitions versus broader down‑payment assistance that reaches more households). Bestadue asked commissioners for further ideas before staff finalizes the first tranche of programming.