St. Louis Park’s 4d affordable housing incentive program was established to help preserve affordable homes in the city. It gives apartment building owners property tax reductions if they agree to keep 20 percent or more of their rental units affordable. The program also helps owners make energy efficient and safety improvements through financial grants.
Benefits for property owners
- 10-year eligibility for 4d property tax rate, provides a 40 percent tax rate reduction on qualifying units
Note: The first tier of valuation on 4d rental properties ($150,000 per unit in 2019) is taxed at a rate 40 percent less than 4a and 4b rental properties. The actual reduction in property taxes may be slightly higher or lower than 40 percent.
- $200 grant per affordable unit, capped at $6,000 per property
- City pays the first year fee for the Minnesota Low Income Rental Classification (LIRC) application, also known as 4d tax classification ($10 per unit)
- Free or low-cost energy efficiency and healthy homes assessments offered
- At least 20 percent of rental units in a building are affordable to households whose family income is at or below 60 percent of the area median income (AMI).
- Existing tenants in units that have program-compliant rents do not need to be income qualified.
- Income qualification for tenants is determined upon initial occupancy. Increased income of tenants in affordable units will not violate program requirements.
- Properties or tax parcels have at least three rental units; licensed properties in good standing with no code compliance violations.
- Buildings can include units with owner occupants, but only rental units are eligible for 4d tax status.
Property owner commitment
Property owners must record a 10-year affordability declaration on their property stating:
- At least 20 percent of the units will remain affordable to households making 60 percent of the area median income (AMI). Up to 100 percent of the units in the building may be enrolled.
- Rent increases for tenants in affordable units are limited to five 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 remain with the property.
How to apply
Complete the 4d affordable housing incentive program application by Feb. 28 at 4:30 p.m. Applicants must also submit a rent roll for units they wish to designated as 4d.
Applications can be submitted by:
- Email: email@example.com
City of St. Louis Park
Attn: Michele Schnitker
5005 Minnetonka Blvd.
St. Louis Park, MN 55416
Program process and timeline
- Feb. 28, 2020 – City emails selected applicants and provides instructions about next steps.
- March 20, 2020 at 4:30 p.m. – Deadline for selected applicants to submit the following to the city:
- Minnesota LIRC application
- City participation agreement and affordability declaration
- Supplier application including Form W-9 (required for grant payment)
- March 26, 2020 – City submits LIRC applications to Minnesota Housing on behalf of selected applicants.
- May 2020 – Applicants receive St. Louis Park 4d incentive grants ($200 - $6,000 per property).
- August 2020 – Minnesota Housing certifies LIRC (4d) classifications.
- November 2020 – 4d program participants receive a notice of proposed levies and taxes for 2020. This notice will reflect the LIRC (4d) classification.
- March 2021 – Annual compliance form due. Each year, until March 2030, 4d participants will be required to submit compliance forms to the city prior to submitting LIRC re-application paperwork to Minnesota Housing Agency.
- March 31, 2021 – Property owners submit Minnesota LIRC re-application paperwork to Minnesota Housing. Re-application paperwork must be submitted annually to retain 4d status.