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Council approves strategic-plan update, directs LAHA spending and backs pooled TIF for St. John’s Woods rehab
Summary
Council approved an update to the Community Development Strategic Plan to account for Local Affordable Housing Aid (LAHA) funds, adopted a one-year LAHA spending plan, and agreed to use pooled TIF funds to finance a siding/window rehab program at St. John’s Woods to preserve LAHA and CDBG reserves.
The Eden Prairie City Council approved an update to the city’s 2023–2027 Community Development Strategic Plan and a one-year spending plan to allocate newly available Local Affordable Housing Aid (LAHA) funds for 2025 priorities.
Community Development Director Julie Klima told the council that LAHA funds were established by the state legislature in 2023 for affordable housing in the seven-county metro and that Eden Prairie received approximately $336,000 in LAHA allocations in 2024. Staff proposed using those LAHA dollars to supplement existing first-time homebuyer and housing rehab programs, create a new first-generation homebuyer program to address equity gaps, and add funds for rental assistance administered through local partners (Prop Shop).
The proposed 2025 allocation presented to the council divides the roughly $336,000 as follows: $100,000 for the traditional first-time homebuyer program, $90,000 for housing rehab loans, $60,000 for a first-generation first-time homebuyer program, and $86,000 for rental assistance. Klima told the council that LAHA funds must be used for direct housing programs (not staffing) and that staff expects LAHA allocations to fluctuate with sales-tax revenues; staff said preliminary guidance suggested the city could see up to a 70% increase in LAHA allocations for 2025 compared with 2024.
Regarding a concentrated repair need, the St. John’s Woods homeowners association plans a siding-and-window replacement project beginning spring 2025 that would affect a number of low- and moderate-income owner-occupied units. Staff explained that funding all rehab requests from CDBG and LAHA would deplete those reserves. As an alternative to exhausting CDBG/LAHA funds, staff proposed and the council approved using pooled Tax Increment Financing (TIF) dollars to fund St. John’s Woods rehab loans so LAHA and CDBG would remain available for other priorities.
Klima confirmed program terms: the city’s first-time homebuyer assistance is structured as a forgivable loan that is forgiven after 30 years if the homeowner remains in the property; if a property is sold before that time the loan is repaid and program income is recycled into future loans. The council moved to approve the updated strategic plan and spending plan; the motion was seconded and carried by voice vote.
