Cloquet considers trust fund to provide affordable housing

12 May 2024

CLOQUET — The city will hold a public hearing about a proposed ordinance to use state funding to develop and preserve affordable housing.

The Cloquet City Council voted unanimously Tuesday, May 7, to hold a public hearing at 6 p.m. May 21 about the proposed establishment of a housing trust fund.

The ordinance would allow the city to pool Statewide Affordable Housing Aid into a trust fund and additional funds to be contributed. The Minnesota Legislature established Statewide Affordable Housing Aid in 2023 to assist local governments in providing affordable access to housing.

The purpose of the aid is to assist cities in helping families from losing housing and to help those experiencing homelessness find housing.

The city received $64,810 in aid last year and is set to receive the same amount again this year. Funds from the program must be spent on qualifying projects after four years of receiving aid, however, funds will be considered spent if they are sent to a local housing trust fund. This would allow the city to maintain its aid money after the spending deadline.

The city may use the money to fund emergency rental assistance; financial support to nonprofit affordable housing providers; financing; and construction, acquisition, rehabilitation, demolition and removal of structures to provide affordable housing.

The state is appropriating $4.5 million to cities with populations higher than 10,000 located outside the Twin Cities metro. The amount each city receives is determined by its cost-burdened households, which the program defines as when rent or homeownership exceeds 30% or more of household income.

In 2023 and 2024, the state will distribute $15.3 million to all counties and $2.7 million to tribal nations under the same program. In 2024, Carlton County will receive $111,092 from the program and the Fond du Lac Band of Lake Superior Chippewa will receive $385,714.

The public hearing comes at the request of the Cloquet Economic Development Authority, which has prioritized finding solutions to affordable housing. The EDA is conducting a housing study that aims to provide a better understanding of the city’s housing situation.

The city must hold a public hearing because the housing trust fund should be established through a city ordinance. Generally, a proposed ordinance has two hearings that allow the public to give feedback and ask questions about the proposal.

The proposed ordinance comes as Carlton County faces a housing shortage. The city has already made moves to address the shortage of available housing, such as its plans to renovate the Solem Hotel.


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