Affordable Housing Resources for Property Owners
Rental Property Tax Reduction Program (4d)
- Tax reductions of approximately 40 percent
- Must keep 20 percent of more of rental units affordable (for properties with 1 to 4 units, over 50% must be deemed affordable)
- Qualify for Resilient Homes Grants covering 90 percent of energy-efficiency improvements, up to $50,000.
- Presentation to learn more.
- 5-year eligibility for 4d property tax rate, which provides a 40% tax rate reduction on qualifying units. Some properties, such as single family rental homes, have a lower base rate of 1.00, meaning the reduction in property taxes may be less significant.
- 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) (PDF), also known as 4d tax classification ($10/unit)
- Resilient Homes Grant funding up to $50,000 (up to 90% project costs) with 10-year 4d tax commitment and eligibility determined by a no-cost energy assessment.
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 with 1-4 units, at least 50% must be affordable.
- 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.
Record a 5-year affordability declaration* on your property stating:
- At least 20 percent 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 percent of the units in the building.
- Rent increases for tenants in affordable units are limited to 6 percent 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.
* Resilient Homes grant program requires a 10-year declaration
- Up to 90 percent of energy efficient project costs are covered by the City’s Resilient Homes Grant (utility rebates and the Resilient Homes Grant cannot exceed total project costs).
- Receive expert support to receive an energy assessment, choose projects, vet contractors and navigate utility rebate applications.
- Naturally Occurring Affordable Housing (NOAH) property owners receive utility bill relief and reduced maintenance needs thanks to new and efficient equipment.
- NOAH occupants receive utility bill relief, more comfortable and healthy homes.
- City makes progress on emission reduction goal of achieving 15 percent of commercial/industrial buildings by 2030 meeting a 20 percent efficiency increase per location.
- Resilient Homes Grant application must be underway, with contracts signed to perform building energy projects, by Dec. 31 of the year the property first applies for 4D.
Rental Property Tax Reduction
- City staff will review the application and email the Declaration of Restrictive Covenants, Program Participation Agreement, and Low Income Rental Classification (LIRC) application.
- Property owner must complete and sign the LIRC and sign and have Notarized the Declaration of Restrictive Covenants.
- Originals of both documents must be returned to Stephanie Hawkinson, Edina City Hall, 4801 W. 50th St., Edina, MN 55424
- City staff will submit the LIRC to the State and record the Declaration.
- City staff will mail a check to the property owner for the grant amount based on the number of affordable units.
Resilient Homes Grant
- After acceptance into the 4d program, you will receive a message via email from Edina's implementing partner, Center for Energy and Environment (CEE).
- Respond to receive assistance to:
- A no-cost energy assessment
- Identify energy-efficiency projects
- Find contractors and complete the projects you choose
- Complete utility rebate application
- Complete the Resilient Homes grant application
- City will issue a check in the amount of the approved grant, within 60 days
November – City begins accepting applications.
February 1 – Deadline to apply.
March – City submits LIRC applications to Minnesota Housing on behalf of all selected applicants.
March - Interested participants begin Resilient Homes Grant program participation through partnership with CEE.
April and May – Applicants receive Edina 4d incentive grants ($100 - $5,000 per property) via U.S. mail.
December - Property Owner must sign contracts for building energy improvements in the year they qualified for 4D in order to benefit from Resilient Homes Grant.
Other Important Dates
August – Minnesota Housing certifies LIRC (4d) classifications
November – 4d program participants receive a notice of proposed levies and taxes for the following year. This notice will reflect the LIRC (4d) classification.
March – Annual Compliance Form (XLS) due. Edina 4d participants will be required to submit compliance forms to the City prior to submitting LIRC re-application paperwork to Minnesota.
March 31– Property owners submit Minnesota LIRC re-application paperwork to Minnesota Housing. Re-application paperwork must be submitted annually to retain 4d status.
Annual Compliance form is due to the City of Edina. This form must be completed and submitted for review yearly.
Instances of non-compliance include:
- Tenants with incomes over 60% AMI, unless tenants lived in the property prior to recording of the declaration.
- Rent increases of more than 6% in a year without unit turnover
- Other violations of program covenants, such as a failure to address housing code violations Non-compliant units will face loss of LIRC (4d) tax status until they come back into compliance.
The LIRC re-application form must be submitted separately by participants to Minnesota Housing before March 31st.
Minnesota Housing will send this form to you each year by mail, and the form must be submitted yearly in order to maintain ongoing 4d tax status.