Inspiring Communities Developer Seeks Increased Subsidy from City

At an upcoming meeting the St. Paul City Council will be asked to approve costs that exceed program limits for homes being developed through the city’s Inspiring Communities program. Inspiring Communities awards grants to developers to build affordable homes on land owned by the Housing and Redevelopment Authority (HRA).

Amani Construction beat out five other proposals in 2022 to obtain a grant to develop two twin homes at 560 Brunson. When they are completed the four homes will be sold to households that make 80% or less than the Area Median Income (AMI), or $97,800 for a family of four. The twin home development will be zero energy ready, meaning that the homes will be built efficiently enough that an addition of a renewable energy source could offset most or all of their energy use.

Total development costs are estimated at $2.4 million, including a $210,728 “developer fee.” Because the homes will be sold for an estimated $320,000 each, the project will require an estimated $1.1 million subsidy to be completed. Since Inspiring Communities subsidies are currently capped at $200,000 per unit, the council’s approval is required to waive the subsidy cap and authorize the project’s $1.1 million cost.

Director of Planning and Economic Development Nicolle Goodman defended the city’s decision to proceed with the project at Wednesday’s HRA meeting. “We’re disposing of lots, we’re creating tax revenue and so we’re recommending that we continue to go forward with this," Goodman said. According to Ramsey County’s tax calculator, the homes would generate approximately $18,817 in annual tax revenue as of 2024.

Inspiring Communities was started in 2013 and primarily develops properties the HRA acquired during the subprime mortgage crisis. The program builds homes for households making 60% to 80% of the AMI. Minority and women-owned businesses are given priority in the request for proposals (RFP) process. Other considerations include sustainable building practices, level of affordability, commitment to selling to a first generation homebuyer, and whether the development has multiple units or has units with four or more bedrooms.