The most consequential discussion centered on proposed changes to the “Rental Homes for Future Homebuyers Program.” The program administrator presented amendments designed to ensure the program’s sustainability and maintain housing quality standards after substantial capital improvements. One of the major changes includes raising the eligibility criteria from 50% to 60% of the area median income (AMI) while maintaining the upper ceiling at 80%. This change is intended to enhance the financial contribution capability of new households entering the program.

The board also reviewed a proposed 5% rent increase, which would impact both new and existing tenants. The increase is justified by rising operational costs and aims to align rent levels with the Metropolitan Council’s affordable rent threshold for households at 50% AMI. The current rents are below the proposed 2025 threshold of $1,615, and the increase would translate to an additional $55 to $71 per month for existing tenants.

During the discussion, concerns were raised about the financial strain the increase might impose on tenants, particularly those facing unexpected low-income living expenses. The program administrator assured the board that most households have been contributing well to their escrow accounts and should be able to manage the increase. However, some board members questioned whether a smaller increase could be considered initially. Despite these concerns, it was argued that the proposed increase is necessary to cover operational costs and maintain the program’s viability.

Communication with tenants about the potential rent changes was also debated. The board emphasized the need for more proactive engagement with tenants to understand their financial situations and concerns. The administrator highlighted that tenants have annual meetings to discuss financial readiness and goals, which should help address the effects of the rent increase.

The board reached a consensus on the necessity of the proposed rent increases, recognizing the importance of ongoing investments in property maintenance and quality. A member articulated that the increase not only raises funds but also ensures properties are kept in good condition, supporting the goal of helping residents transition to homeownership. The board ultimately approved the proposed changes.

Another topic was the approval of a loan deferral request from Aon for Blooming Meadows, a critical affordable housing project. The board reviewed the history of the 306-unit apartment complex, previously known as Village Club, which required intervention to prevent conversion to market-rate rents. Recent renovations totaled $3.2 million, with new units now known as Blooming Meadows North.

Aon requested to defer two loan payments scheduled for 2025, totaling $395,445.66, until the loan’s maturity date in January 2040. The deferral would provide Aon time to negotiate with its senior lender and strategize on further capital improvements. The financial difficulties stem from significant revenue loss during the pandemic and increased operational costs.

Board members expressed differing views on the financial risks involved in deferring payments and the strategic necessity of maintaining affordable housing at Blooming Meadows. A representative from Aon emphasized the importance of the deferral to prevent the loss of affordable units and develop a comprehensive strategy for revitalizing the property. Despite concerns about continued public funding, the board voted unanimously to approve the deferred payments, recognizing the need to support the project’s sustainability.

The meeting also addressed sewer capacity limits impacting future housing developments in Bloomington. The planning manager explained the implications of current sewer constraints, particularly in the North Central and South Central areas. Improvements totaling $55 million are needed as part of the Capital Improvements Program through 2040. The City Sewer Availability Charge (SAC), effective from the beginning of the year, aims to generate funding for these projects. The SAC is set at $2,026 per unit, balancing costs among taxpayers and utility ratepayers. The council directed staff to prioritize critical sewer projects and explore alternative funding options, including federal and state grants.