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Affordable Housing Fund board asks commission to let staff vet revenue-bond option to scale affordable housing
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Summary
The Affordable Housing Fund board and staff recommended the city pursue due diligence on using revenue bonds (and partner tools like TIF or HUD credits) to generate capital for projects that serve households at roughly 60–100% AMI, while keeping millage as a longer-term option.
Deputy manager Kate Behrens and consultant Ryan Kilpatrick briefed commissioners on April 14 about options the Affordable Housing Fund board studied to grow the fund beyond its current grant and donor-directed resources.
Kilpatrick summarized national practices and tradeoffs: general-obligation bonds rely on tax revenue and usually require voter approval, while revenue bonds can finance up to 100% of project costs by relying on a project’s revenue stream and often carry lower interest rates. He said revenue bonds are better suited to projects that can generate sufficient rent or operating revenue (typically housing serving about 60–100% AMI) unless paired with other supports such as tax-increment financing or low-income housing tax credits. "A revenue bond can finance up to a 100% of a project cost," he said.
Behrens said the board’s short-term recommendation is to pursue targeted due diligence on revenue-bond options and to talk with stakeholders and potential partner issuers (EDC, housing commission, or MSHDA) to test feasibility and capital scale. The board did not ask the commission to endorse a specific financing vehicle now; rather staff sought permission to begin external conversations and technical work.
Commissioners generally expressed support for pursuing that next step while emphasizing clarity about which income bands and neighborhoods the tool would serve. Several commissioners stressed that AMI metrics can misstate city affordability and asked staff to consider supplemental measures that combine housing and transportation cost burdens. The board also noted that millage remains a longer-term option to build sustained revenue if public support coalesces.
Next steps: staff will begin external vetting with partner issuers and stakeholders, estimate capital scale, and return with findings and recommended targets for unit counts and AMI bands.
