Archive for June, 2024

Save the Date: Alliance’s 2024 Annual Breakfast

Posted on: June 27th, 2024

Alliance Housing’s Annual Fundraising Breakfast will be on Thursday, September 26th, 2024 at 8am at the American Swedish Institute! Please join us for a meaningful morning as we highlight our plans and accomplishments, hear stories from our tenants, and connect with colleagues, Board members, staff, and other friends of Alliance. Light breakfast will be provided.

Our Breakfast is a key aspect of our fundraising efforts. Proceeds allow us to continue our work to build and maintain affordable housing in Minneapolis. While operational costs have risen leaving us with greater funding needs, we remain dedicated to keeping rents affordable for our tenants and supporting Minneapolis residents of all backgrounds in creating safe, stable homes for themselves and their families.

We hope to see you in September!

Reserve a spot at www.AllianceAnnualBreakfast2024.eventbrite.com or email ggerard@alliancehousinginc.org

Property Tax Case Update

Posted on: June 18th, 2024

For many years, Alliance and other nonprofit owned affordable housing organizations were able to claim property tax exemption status as 501(c)(3) organizations. However, when the City of Minneapolis unexpectedly revoked this status in 2019, we found ourselves scrambling to respond. Property tax exemption provides an important reduction in expenses for Alliance, especially crucial as property operating expenses rise quickly. It allows us to keep rents affordable even without subsidies and allows our fundraising dollars to go towards paying for rent, maintenance, and staffing, as opposed to property taxes.

We’ve been fortunate to have the assistance of Faegre Drinker Biddle and Reath LLP and Larkin Hoffman in appealing this decision. Earlier this year, their hard work paid off when the issue made it all the way to the Minnesota Supreme Court. The court ruled in favor of Alliance, reinstating our property tax exemption status. This was a significant victory not just for Alliance, but for many organizations like ours.

Yet, our work was not done. Following the Supreme Court’s decision, Hennepin County pursued a legislative change that would remove property tax exemption for some nonprofit and charitable organizations providing only housing. You may have seen our outreach earlier this spring, asking you to contact your legislators to oppose this change. While we understand the importance of property taxes in providing revenue for the city, we opposed this change due to its unknown implications and the affects it would have on nonprofit housing providers who are already struggling to keep up with rising costs.

As of the end of the legislative session in late May, Hennepin County’s effort was unsuccessful. This was a relief, but we recognize that there will be continued attempts to pursue the issue. We will continue to advocate on behalf of our tenants and our ability to provide low-cost housing and hope you will join us.

Our hope is that going forward, the county will be open to discussion with nonprofit housing providers and others affected by this change to determine a solution that works for all. We believe in the power of dialogue and collaboration and hope that future discussions will lead to solutions that balance the needs of both the city with the critical role of nonprofit housing providers. Alliance Housing is committed to its mission of providing affordable housing and will continue to advocate for policies that support this goal.

A lifeline for affordable housing in Minnesota

Posted on: June 18th, 2024

Even though it’s been over a year since COVID-19 public health emergencies were lifted, the affordable housing landscape remains unstable. Inflation, skyrocketing maintenance costs, as well as increased security costs have caused major financial hardship, especially for organizations like Alliance who keep our rents low to serve those left out of market rate housing opportunities.

As highlighted by a recent Federal Reserve Bank of Minneapolis study, “Talking ‘toilets, taxes, and tenants’: Challenges mount for apartment owners in the Twin Cities area”, the costs of maintaining properties for not only nonprofits and affordable housing, but for-profit and market rate managers as well, have skyrocketed. From maintenance to taxes, insurance premiums to building security, costs have increased in nearly every corner of the industry.

In response to these ongoing struggles the Minnesota Legislature introduced a lifeline for many organizations – the Stable Housing Organization Relief Program (SHORP). This one-time $50 million grant is designed to support non-profit affordable housing owners like us who are facing rising costs on all fronts. Alliance applied for this grant last fall and were awarded funds to go towards maintaining and stabilizing our properties.

These temporary relief measures like SHORP and RentHelpMN are crucial for nonprofit housing providers to maintain stability as we move out of COVID-19 and into the “new normal”, however, in many ways they are band-aid solutions. The bigger structural issues driving these financial challenges remain unsolved. For big for-profit owners, hiking up rents hasn’t been enough to patch the holes in their cash flow. And for affordable housing providers like us, raising rents often isn’t an option as it doesn’t align with our mission of providing affordable and deeply accessible housing.

Emily, an Alliance tenant who recently graduated with a master’s degree in Healthcare Management, expressed her concerns about the potential rent increase. “A rise in rent would be a significant challenge for our household, especially as I’m starting a career in my field,” she said. Emily believes that stable rents provide the foundation for stable housing, which in turn “offers a platform for a successful life where dreams become reality.” She added, “We’re just getting by as it is, so any increase in rent could bring unwanted stress.”

We need comprehensive, lasting solutions to address the long-term challenges this sector faces. The Minneapolis Fed report drives this point home further. It notes how owners both big and small, for-profit or nonprofit, affordable or market-rate, are all struggling with these financial strains. As the report puts it: “Owners large and small, for-profit and nonprofit, affordable and market-rate, locally based and national, all face significant challenges that, if left unaddressed, could endanger the region’s housing supply.”

While Alliance is grateful for support like SHORP, these measures provide only temporary relief. We need to keep advocating for policies that truly bolster affordable housing providers for the long haul. And it’s going to take a united effort to preserve affordable housing providers in not just Minnesota but across the country.