HRA may apply federal vouchers to Jeremiah Program

December 20, 2018

Members of Olmsted County’s Housing and Redevelopment Authority indicated Tuesday they want to help the Jeremiah Program secure more support for its 40 proposed apartments.

However, a few obstacles lie in the path to giving that help.

“We are dealing with technicalities here,” said Michele Merxbauer, Olmsted County housing program manager.

In May, the HRA committed to covering a portion of the cost of renting nine apartments for 10 years. That commitment would cost an estimated $729,000 over 10 years.

On Tuesday, JoMarie Morris, executive director of the Rochester Jeremiah Program, requested the HRA switch plans and use federal housing vouchers, rather than county tax dollars.

By committing U.S. Department of Housing and Urban Development housing vouchers from the program commonly known as Section 8, she said she’s hoping the county will commit to covering at least half, or 20, of the units.

Susan Strandberg, a community development officer with Three Rivers, who is assisting the Jeremiah Program, said the increased commitment is needed to secure state help.

The local project has been approved for $11.7 million in estimated tax credit equity and $250,000 from the Greater Minnesota Housing Fund, but Morris and Strandberg said making sure rent is covered for at least 15 years is critical for securing financing needed to start construction.

Working with single mothers, the Jeremiah Program ensures its participants pay no more than 30 percent of their incomes for rent and utilities, a sum that might fall short of the actual cost of providing an apartment.

Housing vouchers can cover the difference. Without them, the Jeremiah Program must prove it has funds to fill any gaps for at least 15 years.

Morris said the Rochester program is hoping to break ground in June on a construction effort that is expected to take a year.

“The housing can’t happen soon enough,” she said, noting six families are already making their way through the program and an additional 12 are set to start next month.

The problem for the county lies in securing HUD approval.

Similar vouchers were secured to the Gage East project when it opened in 2016 but the process was muddled and raised federal attention.

“We have a bit more scrutiny on us now,” Merxbauer said.

As a result, the county must request a change to commit 20 of its 556 housing vouchers to the Jeremiah Program apartments. Then, it will need to hold a public hearing on the issue in February before a final decision can be made.

County commissioners, who serve as HRA board members, said the switch to HUD vouchers appears to be a wise move, since it would free up county tax dollars to address other housing needs.

“We’re going to use (the vouchers) one way or another, unless everybody gets a house, which is not likely,” Commission Jim Bier said.

Morris said the vouchers dedicated to the Jeremiah Program have a chance to benefit a larger number of people, since families cycle out of the program after the parents complete their college education.

The dedicated vouchers stay with the program rather than moving with the family, like traditional vouchers do.

The HRA board agreed to start the process of converting its commitment to federal vouchers.

Merxbauer said she plans to inform HUD this week of the expected change, and expects a response within approximately two weeks.

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