Dec. 20—ROCHESTER — The fourth time’s the charm for Three Rivers Community Action.
It took four requests, but the southeastern Minnesota nonprofit has landed state financing support for a planned 36-unit apartment complex aimed to address the need for affordable housing options.
The proposed block-long complex on the north side of Fourth Street Southeast, between Seventh and Eighth avenues, was among 76 projects receiving a combined $191 million in statewide support.
“We’re thrilled that more Minnesotans will soon have access to safe, stable and affordable housing in communities throughout the state,” Housing Commissioner Jennifer Ho said in announcing the statewide funding aimed at creating 2,276 homes
The local project is one of 21 rental projects approved throughout the state. It will be supported through 4% state tax credits and the federal HOME Investment Partnerships Program. It is expected to receive approximately $19 million in financing support, which will include loans, for the proposed $20 million project.
The local community action agency is also slated to receive $480,000 in financial support from the Coalition for Rochester Area Housing and $545,000 from Rochester’s state housing aid. First Homes is also donating a lot to the site, which is otherwise completely owned by Three Rivers.
“I think teamwork and timing are kind of the two keys (to success in the recent state application),” Laura Helle, Three Rivers’ housing development director, said of the project dubbed Eastside Apartments for early planning purposes. “Sometimes it’s just the right time for the project and being persistent pays off.”
“We certainly felt this project was very supported by the city, First Homes and the Coalition this year, and everybody was being pretty strategic with their resources, trying to do the most good they with the funds available,” she added.
Minnesota Housing made its funding announcement Friday morning, and Ho said she is excited about the Rochester project moving forward.
“I really want to applaud Three Rivers’s persistence on this one,” she said, citing the need to turn down the majority of funding requests each year due to limited resources.
While it was the only Rochester-based multi-family housing project approved for state support this year, the Three Rivers project has been a contender since 2020, with applications submitted four times throughout five years.
Ho said the delayed approval helped make the project more competitive and beneficial to the housing effort.
“What we’re seeing in the application in 2024 is a lot different from the application that we saw in 2020,” she said.
Helle said those differences will fill housing needs seen in the community
“Three Rivers adjusted the unit mix to address the need for three-bedroom units in Rochester,” Helle said. “The need shows up in our work in housing advocacy and was supported by reports from partners at Olmsted County and Rochester Public Schools.”
The larger apartments reduced the total number of units from the 40 proposed last year for the block located between Seventh and Eighths avenues along the street that helps connect Rochester Community and Technical College to downtown.
Plans call for the creation of nine one-bedroom apartments, 18 two-bedroom units and nine three-bedroom options.
At least four apartments will serve new tenants with a history of homelessness, while another five will be dedicated to tenants with disabilities. The building is expected to provide rents at a range of affordability to lower incomes with at least 18 apartments priced for people making less than half the area median income, and nine for those earning less than a third of AMI.
It will also include some supportive housing options for qualified tenants, with a full-time housing advocate working out of the building.
Ho said the ability to provide housing at rents affordable for households earning 30% the area median income was crucial to the review of the Eastside project.
“That’s who needs the housing the most and where there’s the least amount of housing that’s available,” she said.
Olmsted County Housing and Planning Director Dave Dunn said the planned project is expected to go beyond addressing housing affordability in the city, since it will also support Rochester’s redevelopment plans by adding housing within walkable distance to downtown and along what is expected to be a key transit corridor.
“This has been a project we’ve been trying to move forward for five years,” he said.
When development will start is uncertain, since financing and plans must be finalized. Helle said it would be ideal to start construction by the end of 2025, but a spring 2026 groundbreaking might be more realistic.
The time will also provide Three Rivers with the opportunity to work with tenants of their four market-rate rental homes that sit on the site and will be replaced by the new apartments. Helle said the agency will provide access to housing support staff, if needed, during the transition.
“We’ll start working with them and supporting their — what I’m sure will be challenging — efforts in finding new housing in Rochester,” Helle said, highlighting the need for added affordable housing options in the city.