Property Tax Reduction and Grant Program
Edina's 4d program preserves affordable homes in Edina by helping apartment building owners obtain property tax reductions if they agree to keep 20% or more of their rental units affordable. The program also helps owners make existing buildings greener through cost sharing for energy-efficiency improvements and solar installations.
Benefits for Property Owners
- 15-year eligibility for 4d property tax rate, which provides a 40% tax rate reduction on qualifying units.
Note: The first tier of valuation ($150,000/unit in 2019) on 4d rental properties is taxed at a rate 40% less than 4a and 4b rental property. The actual reduction in property taxes may be slightly higher or lower than 40%.
- Grant to each 4d property, in the amount of $100 per affordable unit, capped at $5,000 per property
- Payment of first year application fee to the State of Minnesota for Low Income Rental Classification (LIRC) (RTF), also known as 4d tax classification ($10/unit)
- Free or low-cost energy efficiency and healthy homes assessments offered
- Grant to improve energy efficiency of the property with grants providing 90% of the costs, after rebates, up to $30,000.
Owners of market-rate multifamily properties that meet the following criteria:
- At least 20% of the rental units are occupied by, and are affordable to, households whose family income is at or below 60% of the Area Median Income.
- Buildings must have at least 4 units total.
- Income qualification is determined upon initial occupancy. Thereafter, increased incomes of tenants in affordable units will not violate the program requirements.
- Existing tenants in units that have program-compliant rents do not need to be income qualified.
- Buildings can include units with owner occupants, but only rental units are eligible for 4d tax status.
Property Owner Commitment
Record a 15-year affordability declaration on your property stating:
- At least 20% of units at a property (e.g. 2 units at a 10-unit property) will remain affordable to households making 60% of Area Median Income (AMI). You may enroll up to 100% of the units in the building.
- Rent increases for tenants in affordable units are limited to 6% or less annually, unless the unit is turning over to a new tenant or the owner provides evidence that a larger rent increase is needed to address deferred maintenance or unanticipated operating cost increases.
- If a building is sold, declarations run with the property.
How To Apply
- Jan. 14, 2019 – City begins accepting applications. The application asks applicants to provide signed City participation agreement and affordability declaration, a rent roll for units they wish to designate as 4d, and also includes necessary information required in the Minnesota LIRC application. Applicants with multiple properties to submit multiple applications.
- March 14, 2019 at 4:00 p.m. – Deadline for selected applicants to submit signed Minnesota LIRC application, signed City participation agreement and affordability declaration (PDF), and Supplier Application including Form W-9 (required for grant payment) to the City of Edina.
- March 31, 2019 – City submits LIRC applications to Minnesota Housing on behalf of all selected applicants.
- April and May of 2019 – Applicants receive Edina 4d incentive grants ($100 - $1,000 per property) via US mail.
- April 30, 2019 – Deadline to complete on-site Energy Assessment needed for Energy Efficiency Grant Funding.
- July 6, 2019 – Application due for Energy Efficiency Grant Funding.
Other Important Dates
- August 2019 – Minnesota Housing certifies LIRC (4d) classifications
- November 2019 – 4d program participants receive a notice of proposed levies and taxes for 2020. This notice will reflect the LIRC (4d) classification.
- March 2020 – Annual Compliance Form (xls) due. Each year, until March 2034, Edina 4d participants will be required to submit compliance forms to the City prior to submitting LIRC re-application paperwork to Minnesota.
- March 31, 2020 – Property owners submit Minnesota LIRC re-application paperwork to Minnesota Housing. Re-application paperwork must be submitted annually to retain 4d status.